Friday, December 05, 2008
The Labor Department reported a decline of 533,000 in nonfarm payrolls during November which, when combined with downward revisions to the data for September and October, totaled 732,000 in newly reported job losses.
The September job loss of 284,000 was revised to 403,000 and the October decline of 240,000 was adjusted to 320,000. Interestingly, the September figure was originally reported at 125,000 in October, but was then revised to 284,000 last month, before today's final revision to 403,000 - revisions more than tripled the original count.
The November plunge marked the sharpest decline in payrolls since December 1974, far surpassing the biggest monthly drop during each of the last four recessions:
Job losses over the last three months now total 1.3 million with the year-to-date figure standing at a whopping 1.9 million.
The unemployment rate, which is calculated using the separate household survey, rose from 6.5 percent in October to 6.7 percent in November, the highest level since October 1993.
Only two payroll categories posted gains for the month - an increase of 52,000 for health and education services along with a 7,000 gain in government jobs. There should be some job losses in state and local governments in the period ahead as an increasing number of budgets are impaired by the economic slowdown.
Elsewhere, the retail sector now appears to be in a virtual free fall. Overall, employment in trade, transportation, and utilities declined by 147,000 with retail trade positions down 91,000. This decline was paced by a net loss of 27,000 jobs at auto dealers and 18,000 positions at clothing stores.
Within the professional and business services category, a net loss of 78,000 temporary jobs accounted for the majority of the overall decline of 136,000. Big reductions in temporary help are normally considered a very bad omen for the future of the labor market.
The losses in construction and manufacturing continue, but one sure indication that the National Bureau of Economic Research was correct in finally calling the current period a recession lies within the leisure and hospitality category.
In a sign that people are eating out less and making fewer trips away from home, employment at hotels and motels fell by 37,000 in November and positions at food service and drinking establishments saw a monthly decline of 18,000.
Big declines in these categories only occur during recessions.
This is about as bad as it gets.